Richard J. Montgomery and Adele S. Montgomery - Page 6

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               In the notice of deficiency, respondent determined a                   
          deficiency in petitioners' excise tax under section 4980A in the            
          amount of $7,569.5  In the petition, petitioners claimed an                 
          overpayment of income tax in the amount of $30,139 with respect             
          to the additional tax imposed under section 72(t).                          
               The issues for decision are whether petitioner Richard J.              
          Montgomery is liable for the 15-percent excise tax under section            
          4980A, and whether petitioners are liable for the 10-percent                
          additional tax under section 72(t).  As previously noted, the               
          resolution of these issues turns on whether the Transfer Refund             
          was paid from a qualified plan within the meaning of sections               
          4980A(e)(2), 72(t) and 4974(c).                                             
          1.   Section 4980A Issue                                                    
               Section 4980A imposes a 15-percent excise tax on excess                
          distributions from qualified retirement plans.  Sec. 4980A(a).              
          As relevant herein, an "excess distribution" is defined as the              
          aggregate amount of "retirement distributions" with respect to              
          any individual during any calendar year to the extent that such             
          amount exceeds $150,000.  Sec. 4980A(c)(1).  Retirement                     
          distributions are the amounts distributed to an individual under            
          an individual retirement plan or any "qualified employer plan"              
          with respect to which such individual is or was the employee.               

          5 See supra note 3 regarding respondent's concession.                       

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